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Resale Price Maintenance and Free Riding - New Insights in the U.S.A. Compared to the European Approach

GIURISPRUDENZA COMMERCIALE, Milan, Giuffrè, Vol. 37. No. 1,172, 2010

15 Pages Posted: 7 Nov 2009 Last revised: 27 Apr 2010

Linda Briceño Moraia

University of Pavia; University of Milan

Date Written: November 5, 2009

Abstract

The positive or negative effects that vertical agreements may have on intra-brand competition have always been object of debate between academics, in particular when the agreement sets a minimum resale price. The paper deals with this particular kind of vertical restraint, the so called minimum “resale price maintenance” (minimum RPM), which only recently has been considered as having also pro-competitive effects in the relevant market taken into consideration.

With a decision of 2007 the U. S. Supreme Court overruled the per se condemnation of this practice contained in Dr. Miles, and for the first time it applied the rule of reason, in consideration of the potential pro-competitive effects of minimum RPM. In particular, the possible reduction of the risk of free riding is one of the most debated questions, surrounded by various uncertainties.

In the EC law, Commission Regulation (EC) n. 2790/1999 reflects a new approach, based on the economical analysis of vertical restraints. The exemption contained in this Regulation applies to all vertical agreements, except those contained in a “black list”, the so called “hard core restrictions”. And minimum RPM falls into it. Both Regulation (EC) n. 2790/1999 and n. 1400/2000 will expire on May 2010, and therefore it is interesting to question on the possible future developments of the EC position towards minimum RPM: and the analysis of the recent case law of the Court of Justice doesn’t furnish indications of a change of the EC approach in the same direction undertaken by the U. S. Supreme Court.

Keywords: Vertical agreements, intra-brand competition, inter-brand competition, minimum resale price maintenance, Leegin decision, Commission Regulation (EC) n. 2790/1999, free riding

Suggested Citation

Briceño Moraia, Linda, Resale Price Maintenance and Free Riding - New Insights in the U.S.A. Compared to the European Approach (November 5, 2009). GIURISPRUDENZA COMMERCIALE, Milan, Giuffrè, Vol. 37. No. 1,172, 2010. Available at SSRN: https://ssrn.com/abstract=1500268

Linda Briceño Moraia (Contact Author)

University of Pavia ( email )

Strada Nuova 65
Pavia, 27100
Italy

University of Milan ( email )

Via Festa del Perdono, 7
Milan, 20122
Italy

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